Established in the early 1990s, the internal maritime transport market is functioning quite well. In 1986, the Council applied the principle of freedom to provide services, (Articles 49 and 50 TEC, new Articles 57 and 58 TFEU) to shipping services between the Member States and third countries [Regulation 4055/86]. In 1992, the freedom to provide services was extended to maritime transport within Member States (maritime cabotage) for European shipowners who have their ships registered in and flying the flag of a Member State, provided that these ships comply with all the conditions for cabotage in that Member State [Regulation 3577/92]. For vessels carrying out mainland cabotage and for cruise liners, all matters relating to manning are the responsibility of the State in which the vessel is registered. However, for ships smaller than 650 Gt. and for vessels carrying out island cabotage, all matters relating to manning are the responsibility of the host State. The ability to transfer ships from one register to another within the European Union may improve the operating conditions and competitiveness of the European merchant fleet [Regulation 789/2004]. A Directive concerning the Agreement on the organisation of working time of seafarers, concluded by the European Community Shipowners' Association and the Federation of Transport Workers' Union in the European Union, is important for levelling both working conditions of sailors and competition conditions in this area [Directive 1999/63].
Detailed rules were laid down for the application of Articles 81 and 82 of the EC Treaty (new Articles 101 and 102 of the TFEU) to maritime transport in order to ensure that competition is not unduly distorted within the common market [Regulation 1419/2006 repealing Regulation 4056/86]. These specific rules have been replaced by the general competition rules applying to all sectors [Regulation 1/2003, see section 15.2.1]. However, block exemptions [see section 15.3.3] still exist for a transitional period for certain concerted practices between liner shipping companies (maritime conferences and consortia), which provide international liner shipping services from or to one or more European ports [Regulation 823/2000]. Thanks to these exemptions from the general rules of Articles 101 and 102 (TFEU), shipowners may jointly organise services, thus rationalising their activities as maritime carriers and obtaining economies of scale and cost reductions, while at the same time providing users with a better-quality service. They allow notably the coordination and joint fixing of sailing timetables, the determination of ports of call, the exchange, sale or cross-chartering of space or "slots" on vessels, the pooling of vessels, port installations and operation offices. Commission guidelines provide guidance on the application of Article 81 of the EC Treaty (new Article 101 TFEU) to the maritime sector. European guidelines for State aid in the maritime transport sector are intended to make public assistance transparent and to define what kinds of aid scheme can be introduced to support the EU's maritime interests [see also section 17.3.2].
International safety standards for passenger vessels are applied in the European Union. Thus, the International Conventions for the Safety of Life at Sea (SOLAS) and for the prevention of pollution by ships (MARPOL) are applicable to the Member States - and therefore to ships flying their flags [Regulation 2158/93]. The Member States must subject cargo ships and passenger ships to initial and annual surveys to check in particular compliance with the SOLAS Convention [Directive 1999/35]. Passenger ships operating on domestic voyages, which are not covered by the SOLAS international Convention, are covered by a European Directive, which is intended to guarantee maximum safety for passengers and, at the same time, to provide a level playing field based on convergent standards in European shipping [Directive 2009/45]. In order to ensure that the maximum capacity of ships is not exceeded and to provide accurate information to the emergency services in the event of an accident, another Directive obliges shipping companies operating to or from European ports to count and register the crew members and persons sailing on board passenger ships [Directive 98/41]. A Regulation concerning the rights of passengers when travelling by sea and inland waterway aims, among other things, at ensuring a high level of protection for passengers that is comparable with other modes of transport [Regulation 1177/2010]. The EU implements the International Management Code for the Safe Operation of Ships and for Pollution Prevention adopted by the International Maritime Organisation (ISM Code) [Regulation 336/2006]. Ships using European ports and sailing in the waters under the jurisdiction of the Member States must respect the international and relevant European legislation on maritime safety, maritime security, protection of the marine environment and on-board living and working conditions (port State control) [Directive 2009/16, last amended by Regulation 2016/2072].
The independent European Maritime Safety Agency assists the Commission with drafting maritime legislation, monitoring application by the Member States and coordinating inquiries after accidents at sea or after accidental or illicit pollution caused by ships [Regulation 1406/2002, last amended by Regulation 2016/1626]. It is meant to: ensure a level playing field in the sector; provide technical and scientific support and a high level of stable expertise to properly apply the European legislation in the fields of maritime safety and ship pollution prevention; monitor the implementation of this legislation by the Member States; and evaluate the effectiveness of the measures in place. A Directive sets up common rules and standards for ship inspection and survey organisations in order to ensure a high level of competence and independence of these organisations [Directive 2009/15]. To prevent marine pollution (such as that caused by the "Erika" and "Prestige" accidents off the coasts of France in December 2000 and Spain in December 2002), a Regulation established an accelerated phasing-in scheme for the application of the double-hull or equivalent design requirements of the MARPOL 73/78 Convention to single hull oil tankers [Regulation 417/2002].
International shipping relations are clearly of vital importance in the maritime transport sector. This is why one of the first measures taken in this area was the introduction of a consultation procedure on international links and on action relating to such matters within international organisations [Decision 77/587]. Most of the rules and requirements for seagoing vessels are negotiated in the International Maritime Organisation (IMO), a specialised agency of the United Nations, of which all EU Member States are members. The European Union has incorporated in a Directive the rules on quality standards for training programmes and institutes, the issue of certificates, medical standards and rest periods for seafarers contained in the IMO Convention on Standards of Training, Certification and Watchkeeping for Seafarers [Directive 2008/106].
The EU has established the liability of carriers of passengers by sea in the event of accidents [Regulation 392/2009] and has acceded to the Protocol of 2002 to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea [Decision 2012/22]. Member States must take all necessary steps to ensure that tankers carrying oil, gas and chemicals and docking in the EU's sea ports be obliged to respect certain safety conditions. Member States with a North Sea or Channel coastline must take steps to ensure that ships in these areas are piloted by properly qualified sea pilots [Directive 79/115]. The European vessel traffic monitoring and information system aims at enhancing the safety and efficiency of maritime traffic, improving the response of authorities to incidents, accidents or potentially dangerous situations at sea, including search and rescue operations, and contributing to a better prevention and detection of pollution by ships [Directive 2002/59, last amended by Directive 2014/100]. A Directive has established a standard electronic transmission of information and rationalised reporting formalities for ships arriving in and ships departing from EU ports [Directive 2010/65]. Another Directive aims to enhance safety at sea and to prevent marine pollution through the uniform application of the relevant international instruments relating to marine equipment to be placed on board EU ships, and to ensure the free movement of such equipment within the Union [Directive 2014/90]. Directive 2005/65 imposes various measures to be taken by the Member States to enhance port security [Directive 2005/65]. The Member States of the EU have agreed to sign, ratify or accede to the International Convention on Civil Liability for Bunker Oil Pollution Damage (the Bunkers Convention) [Decision 2002/762]. They have also agreed to ratify or accede to the International Convention on Liability and Compensation for Damage in connection with the Carriage of Hazardous and Noxious Substances by Sea (the HNS Convention), tending to improve protection at international level for victims of marine pollution[Decision 2002/971]. A Committee on Safe Seas and the Prevention of Pollution from Ships (COSS) assists and advises the Commission on all matters of maritime safety and prevention or reduction of pollution of the environment by shipping activities [Regulation 2099/2002, last amended by Regulation 2016/103].
Market monitoring was rendered necessary at the end of the 1970s by the problem of unfair competition from the fleets of certain State-trading countries and certain Far East countries. This competition had to be countered by shared information and possibly by common action. Therefore, an information system was established to keep the European institutions abreast of the activities of the fleets of third countries [Decision 167/2006]. A Council Decision provides for the possibility of counter-measures in the event of unfair competition in international merchant shipping [Decision 83/573]. Member States should take coordinated action when a measure introduced by a third country or by its agents restricts or threatens to restrict the free access of shipping from a Member State to ocean trade [Regulation 4058/86]. A European procedure should be followed to counteract unfair pricing practices by certain shipowners who are nationals of third countries and are servicing international cargo shipping routes, when these practices seriously upset the structure of trade on a route to, from or within the EU [Regulation 4057/86].